The National Audit Officeâ€™s latest report to Parliament on the procurement of Criminal Legal Aid in England and Wales will make uncomfortable reading for the Legal Services Commission.

In 2008-09 the Commission spent more than Â£1.1 billion on criminal legal aid, Â£112 million of which was spent on 432 Very High Cost Criminal Cases. Â 871,000 acts of assistance at police stations and 125,000 acts of assistance at the Crown Court were funded. The LSC spent Â£22 per capita on criminal legal aid, more than any other comparable developed nation except Northern Ireland. At the other end of the scale France spent Â£0.9 per capita, though differences are partly attributable to the greater defence costs inherent in an adversarial legal system, in contrast to jurisdictions where judges play a greater investigative role.

The NAO found that the data used by the LSC to make payments for criminal legal aid services is inaccurate and incomplete. The existing controls over the quality of data and the accuracy of payments made to firms are not effective, and the impact of reforms has not been evaluated consistently. At present, gaps in the LSCâ€™s knowledge about its supplier base mean that it has not developed a good understanding of the market, such as the cost structures of different types of firms and their profit margins. The NAO concludedÂ that â€œthere are significant weaknesses in the way criminal legalaid has been administeredâ€¦New schemes have not always been pilotedâ€¦(and) the Commissionâ€™s ability to make payments to criminal legal aid suppliers is undermined by poor administrationâ€.

An NAO survey of 369 firms delivering criminal legal aid found that it accounted for almost 60 per cent of turnover. Firms reported an average profit margin of 18.4 per cent in the last financial year, a fall from 21.6 per cent three years ago. They reported a wide range of profits, with 16 per cent of firms reporting no profit in the last financial year. Almost 80 per cent of firms which also conducted private legal work reported that criminal legal aid was less profitable, and firms which had withdrawn from contracts reported the main reason was that remuneration compared unfavourably with other types of legal work.Â In their survey, 28 per cent of firms reported it unlikely they would be conducting criminal legal aid work in five yearsâ€™ time, due mainly to lack of profitability and the prospect of tendering. The survey also revealed tensions in the relationship between the profession and the LSC. Of those who responded to the survey, 36 per cent of solicitors perceived the LSC as â€˜unhelpfulâ€™, 29 per cent believed the LSC did not fully understand the legal system and 18 per cent cited the Commissionâ€™s â€œconstant change of the system, processes and rules.â€

The Law Society has welcomed the report. Legal aid manager Richard Miller said:

â€œThis report goes a long way in dispelling the belief that legal aid lawyers are profiteering from the system. Many of them are not even earning any income from the work they do at all. This is a picture of a supplier base on the point of crumbling into insolvency. It is those requiring access to justice who will lose out in the long run if there are not enough solicitors providing legal aid criminal defence services.â€ He called for a major overhaul of the system to simplify criminal defence contracts so that they are easier and less expensive for the legal aid solicitors and LSC to administer.

This post was written by:

Mike Gribbin is a retired Civil Servant with wide experience, including the drafting and implementation of Parliamentary legislation and regulations. He is the editor of “Criminal Offences Handbook”, a uniquely comprehensive guide to more than one thousand ways to fall foul of UK criminal law. He is Editor of the Upper Case Legal Journal and has been writing blog posts for the past eight years.